By Tom Bill, head of UK residential research at Knight Frank
International buyers and tenants are looking more closely at the UK due to economic instability and political uncertainty elsewhere in the world.
You would probably sell a £1.5 million house in Dulwich more quickly than a £7.5 million house on the edge of Hyde Park at the moment.
The tariff turbulence of recent weeks has put downwards pressure on mortgage rates as the Bank of England is expected to cut more proactively to support the UK economy, starting with a 0.25% reduction next week.
In simple terms, Donald Trump has made buying a house in the UK slightly cheaper. The five-year SONIA swap rate closed trading at 3.7% last Thursday, which compared to a figure of more than 4% at the end of March before the first tariff announcement.
Lower mortgage rates primarily benefit needs-driven property markets, where people move for reasons that include schooling and jobs. Higher-value markets, where buyers are more discretionary, are more exposed to decisions taken in the White House or on Downing Street. Hence the likely speed of the Dulwich sale.
The number of UK exchanges below £5 million increased by 7% in the six months to March versus the previous year, Knight Frank data shows. Above that figure, there was a 6% decline.
The Wrong Message
The mood of reticence in higher-value markets has been magnified by the government’s decision to scrap non dom status from this month. Even for those who had no intention of becoming a non dom, it has sent the wrong message.
However, any negativity has been dwarfed by the wider commotion on global financial markets this month.
The gold price hit a record high and is 40% above where it was a year ago because investors are craving safety.
Prime central London property was famously a safe haven investment of choice during the global financial crisis, and while prices may not be about to grow 68% as they did between 2009 and 2014, the UK is gaining attention as a beacon of stability.
Global markets have been especially volatile in recent weeks following the announcement of US trade tariffs and the subsequent mixed messages sent from the White House. Meanwhile, the euro zone faces its own structural economic problems, as well as weak growth prospects in the former powerhouse of Germany.
Popularity By Default
It’s too early to show in the numbers but agents have detected a shift in the mood.
“The UK is playing the safety card, but more by default than design,” said Stuart Bailey, head of London super-prime sales at Knight Frank. “We are seeing buyers from the Middle East who are looking to make mid- to long-term investments in London because it is secure.
“Price declines have happened, but they took 10 years because there are enough owners sitting on cash who are not forced to sell. A strong rental market strengthens the safety net that prevents overnight price crashes from happening.”
Average prices in prime central London are 18% lower than the last peak in mid-2015. Combined with the relative weakness of the pound since then, that will look like particularly good value for some.
Overseas buyers denominated in or pegged to the US dollar would benefit from a relative discount (taking property prices and currency movements into account) of 37% compared to July 2014.
The polarising effect of the US election in November means the UK is already seeing a slight uptick in the number of US buyers. However, it is smaller than the surge in online property searches from the US that took place last year.
The United States accounted for 6.9% of all Prime Central London buyers in Q1 2025, Knight Frank data shows, which was the third highest figure for a single quarter in ten years.
A Breath of Fresh Air
There is also an increase in overseas buyers looking beyond the M25, says Peter Edwards, co-head of super-prime sales in the Country at Knight Frank.
“The UK is a breath of fresh air compared to more unstable parts of world,” he said. “Some non doms have decided to leave but many have decided to stay.”
Among those who have left, some have since returned to the UK, said Arya Salari, head of Knightsbridge lettings at Knight Frank.
“There was an initial knee-jerk reaction by a number of tenants who decided to leave but some have since changed their minds and come back,” he said, citing the UK’s education system as a major attraction.
And on an institutional scale, growing sovereign wealth from countries including Canada, Australia, Norway, Singapore and Qatar will continue to flow into UK commercial and residential property because their own domestic markets are too small, said Savvas Savouri, chief economist at Quantmetriks. He cited central and northern England as attractive destinations for returns.
Meanwhile, Larry Fink, CEO of world’s largest asset manager Blackrock, said last week the company has boosted its UK holdings as he believes the country’s assets are undervalued.
“The UK remains attractive, political warts and all,” said Savouri.